This is page three. It is the schedule of adjustments page of the settlement agreement. The following fields are completed:Name of Partnership: Daffodil PartnershipEIN: D2-0123456Tax Year Ended: 12/31/2004Details of Adjustments to Ordinary Income:(1) Depreciation Expense $90,000.00It is determined the partnership overvalued its depreciable basis for its energy property by $900,000.00. The correct basis is $100,000.00 and not $1,000,000.00 reported on the 2004 Form 1065. The partnership depreciation expense has been recomputed as shown in Exhibit A.(2) Management Fee $25,000.00(3) Amortization Expense ($5,000.00)It is determined the partnership may not deduct management fees reported of $25,000.00. The fee was paid to organize the partnership and may not be deducted as a trade or business expense. Pursuant to the partnership election, the fee may be amortized over 60 months beginning January 1, 2004. Total Adjustments to Ordinary Income: $110,000.00Other Adjustments:A. (4) Basis of Energy PropertyAdjustment $ 900,000.00As Reported 1,000,000.00Corrected $ 100,000.00In the remarks section at the bottom, the text states:4. It is determined that the partnership's basis in energy property is $100,000.00 rather than $1,000,000.00.Accordingly, the basis in energy property is reduced by $900,000.00. 5. Negligence penalty will be assessed.Partner level defenses to the negligence penalty may be raised in a refund forum after the penalty is assessed and paid.